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Report: Trump threatens sanctions if US troops forced out of Iraq

U.S. President Donald Trump threatened to impose sanctions on Iraq if it attempts to expel American troops from the country as geopolitical tensions simmer in the Middle East, CNBC reported.

The warning came after Iraq's parliament, in an extraordinary session Jan. 5, approved a resolution to ask the government to remove foreign troops from the country. Trump reportedly warned that if they attempt to expel U.S. forces with any hostility, they will face penalties that will "make Iranian sanctions look somewhat tame."

Tensions ratcheted up in the Middle East after a U.S. airstrike late Jan. 2 in Baghdad, Iraq, killed Qassem Soleimani, the head of Iran's Islamic Revolutionary Guard Corps' elite Quds Force, sparking fears of an outright armed conflict between Washington, D.C., and Tehran.

Iran has since appointed a successor for Soleimani and vowed to retaliate. Meanwhile, Trump threatened to hit 52 Iranian sites if the country targets U.S. assets in retaliation. The number of sites proposed by Trump reflects the number of Americans taken hostage by Iran "many years ago," the president tweeted.

Oil prices continued to climb, with Brent crude surging 2.4% on the ICE Futures Exchange to $70.24 per barrel and the West Texas Intermediate adding 2.1% to $64.36 per barrel as of 1 a.m. ET on Jan. 6.

Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond, flagged a potential escalation with Iran as a U.S. recession risk.